Evaluating the Impact of China’s Value-Added Tax Retention and Rebate Policy on New Quality Productivity Through a Dual Machine Learning Model

New quality productivity(NQP), driven by new energy sources, innovation, high productivity, and sustainability, has gained increasing attention as the conflict between traditional energy use and green production intensifies. Most existing research defines NQP and discusses its significance, while only a few studies explore NQP enhancement methods. This study investigates how China’s value-added tax (VAT) retention and rebate policy, as an exogenous disturbance, influences firms’ transformation toward NQP. Using a dual machine learning approach, we analyze 26,573 data points from 4,401 listed companies in China’s A-share market from 2014 to 2022. Our findings reveal a substantial increase in the NQP of pilot firms after China implemented the VAT retention and rebate policy. This increase occurs because the tax-credit rebate policy substantially enhances the firms’ levels of green innovation and digitization. Additional tests show that the policy more effectively promotes state-owned enterprises (SOEs), non-new energy firms, and high-tax burden firms. Our research expands the literature on firms’ development of NQP and offers practical insights into how firms can leverage state tax support to drive production transformation.